Panel backs Democratic proposal for pension cuts

SALEM — The Oregon Legislature's powerful budget committee on Friday approved a Democratic effort to curb pension benefits, sending the measure for a vote in the full Senate that could come next week.

The committee's party-line vote followed complaints from Republicans that the bill is a timid approach that won't give taxpayers enough relief from significant increases in pension costs. Democrats are also feeling heat from the left as public-employee unions say it would illegally violate a contract they have with the state.

“I think we've united the entire state, all sides, in dislike of this proposal,” said Rep. Peter Buckley, an Ashland Democrat and a leading architect of the pension-cutting bill. “But again, we stand by it because we do believe it is balanced and fair.”

Severe investment losses during the Great Recession erased 27 percent of the pension fund in 2008 alone, requiring steep increases in taxpayer contributions to make up the difference and limiting money available for state and local government services.

The Democratic proposal would reduce cost-of-living increases in retirement checks on a graduated scale and eliminate supplemental tax payments for retirees living outside Oregon. It also would push $350 million worth of payments into future years.

Republicans offered their own plan that would have further cut pension benefits, saving more money. They said only a substantial reform of the pension system will prevent the need for more cuts in the future.

Two Republicans, Reps. Greg Smith of Heppner and Bob Jenson of Pendleton, voted no for another reason. They said the state had an obligation to keep promises.

“Where I come from in Eastern Oregon, when you give your word you keep it,” Smith said. “Good or bad, you keep it.”

Gov. John Kitzhaber has pushed for steeper cuts, but his office says he'll sign the Democratic bill if it reaches him.

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Comments

kona

Gov. Kitzhaber gave cover for a weak Democratic presentation for PERS reforms. This works for the public sector unions in Oregon. They can now say they tried and the only solution will be to raise taxes. All of this is to the detriment of Oregon. Oregon is getting what the sleepy electorate deserves, I guess.

08:43 am - Mon, April 8 2013

sbagwell

I'm in total agreement with you on that one. I'm not surprised at the legislative Democrats, only disappointed. In Kitzhaber's case, I expected more, so I'm doubly disappointed. I don't think they are going to succeed with much if anything in the way of tax hikes, so we may yet get at least some limited additional movement on PERS. Here's hoping the GOP forces hold firm and help make that happen. PERS relief is desperately needed.Steve

09:28 am - Mon, April 8 2013

-MT

I agree.

11:18 am - Mon, April 8 2013

kona

The Democratic Party is playing political gamesmanship with the future of Oregon. They will push this inadequate PERS measure through (saying they "tried") and then blame the Republicans for not passing increased taxes to make up for the inadequacy.

Next step will be attempts at local option levies to cover PERS mismanagement.